Work from Home Tax Deductions 101: How to Claim IT Expenses and Maximise your Savings

As the world of work continues to evolve, more and more employees are finding themselves working remotely. At Intuitive IT, we recognise the many benefits that come with this arrangement, including increased flexibility, reduced commute time and improved work-life balance. First, however, it’s essential to understand the tax implications of working from home.

We will dive into work-from-home tax deductions and how they relate to IT support. By understanding the deductions available to remote workers and the role of IT support in facilitating a productive work-from-home experience, employees can maximise the benefits of remote work and minimise their tax liability. Employees that can easily claim their expenses make up part of a Productive Workforce.

What expenses can be claimed as tax deductions when working from home?

What kind of expenses can be written off when working from home? Or you need help tracking those expenses for tax purposes. No worries, we’ve got you covered! We’ve compiled a list of the most common questions that come up when it comes to work-from-home tax deductions. We’ll cover things like what kind of expenses can be written off, how to keep track of those expenses, and if there are any limits on how much you can claim. These are important to remember, as they can significantly impact your bottom line. And remember, we’re here to make it easy for you. 

What expenses can be claimed as tax deductions when working from home?

One of the most frequent questions is, “What expenses can be claimed as tax deductions when working from home?” Well, the good news is that several expenses can be written off, including:

• The cost of a computer or laptop,
• Internet service,
• Office supplies, and
• Even a portion of your rent or mortgage if you have a dedicated home office.

Remember that these deductions are only applicable if the expenses were incurred while working from home and would not have been incurred if you worked in an office.

It’s essential to document these expenses, so keep receipts, invoices, or any other proof of purchase; it will make the process of claiming deductions much easier.

How do I document these expenses for tax purposes?

Another question that comes up often is, “How do I document these expenses for tax purposes?” Documenting expenses is crucial to claim deductions for working from home. In addition, the ATO requires that you keep records of your costs, so it’s essential to keep all the receipts, invoices or other proof of purchase. See the ATO’s article on Work from Home expenses here.

You can also use an app or spreadsheet to track your expenses and make it easy to keep everything organised. Furthermore, if you are claiming a portion of your rent or mortgage as a deduction, you should have a dedicated home office and be able to provide detailed records of that space’s square footage and usage. Finally, keep all your records and documentation for at least seven years if the ATO asks to review them.

Are there any limits on the amount claimed as a deduction when working from home?

A third question that often comes up is, “Are there any limits on the amount that can be claimed as a deduction when working from home?” Again, the answer is yes; the ATO limits the amount of deductions you can claim.

The ATO has a set of guidelines for calculating the amount of deductions that can be claimed for a home office. For example, if you claim a portion of your rent or mortgage, the amount you can claim is limited to the percentage of your home used for business purposes. Additionally, there is a dollar limit on the amount you can claim for certain expenses, such as office supplies. It’s important to familiarise yourself with the ATO guidelines to ensure that you stay within your deductions, which could lead to penalties. Remember that it’s always best to consult a tax professional for specific advice and guidance.

Your MSPs role in Working from Home

IT support plays a vital role in the work-from-home scenario, both in terms of setting up the necessary technology for employees to be productive and ensuring that employees can claim tax deductions for expenses incurred while working remotely. IT support helps employees set up the necessary technology, such as:

• laptops,
• internet,
• software and tools, and

Troubleshoot any issues that may arise. Additionally, IT support can provide documentation such as invoices, receipts, or any other proof of purchase for the technology provided and evidence of dedicated home office space to assist employees in claiming deductions and minimising their tax liability. Finally, by providing the technology and support employees need to work effectively, IT support helps to ensure a smooth transition to remote work and helps to maintain productivity.

In conclusion

As we have seen in this blog post, work-from-home tax deductions can be a complex topic for employees and businesses. However, by understanding the available deductions and the role of IT support in facilitating a productive work-from-home experience, employees can maximise the benefits of remote work and minimise their tax liability. Intuitive IT is committed to providing clients with the information and support they need to make the most out of their work-from-home arrangements. We hope this has helped give a better understanding of work-from-home tax deductions and the importance of IT support. Remember, it’s always best to consult a tax professional for specific advice and guidance. Let us help you optimise the productivity of your remote workforce.